UPDATE 2-McDonald's French HQ searched in tax probe - sources

Reuters Staff

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PARIS, May 26 (Reuters) - French investigators searched McDonald’s French headquarters on May 18, targetting the U.S. fast food chain in a tax probe, sources with knowledge of the matter told Reuters on Thursday.

A preliminary inquiry had been opened early this year after former investigating magistrate and politician Eva Joly filed a lawsuit in December on behalf of an employee committee, a judicial source said.

“A search was indeed carried out at McDonald’s headquarters in France on May 18,” the other source said, confirming a report first carried by Les Echos business daily.

The judicial source said that “many documents” had been seized during the raid.

French business magazine L‘Expansion reported last month that authorities had sent McDonald’s France a 300 million euro ($336 million) bill for unpaid taxes on profits believed to have been funnelled through Luxembourg and Switzerland.

It said tax officials had accused the giant U.S. burger chain of using a Luxembourg-based entity, McD Europe Franchising, to shift profits to lower-tax jurisdictions by billing the French division excessively for use of the company brand and other services.

The judicial source confirmed the investigation was looking into this.

McDonald’s declined to comment on the search, referring back to past comments that it is proud to be one of the biggest tax payers in France.

A spokeswoman for the French budget ministry declined to comment because of the confidentiality of particular tax matters.

News of the search emerged after dozens of French police raided Google’s Paris headquarters on Tuesday as part of a tax evasion investigation.